A Written Parliamentary Question from Gordon MP Richard Thomson has revealed that despite a consultation as far back as October 2019 on protecting the credit balances of energy company customers, the UK Government failed to act and the subsequent collapse of 38 energy companies means households are picking up the cost of the lost balances.
It is estimated that the additional cost added to energy bills for this is around £68.00 per household.
Commenting, Richard Thomson MP, who is also a Treasury spokesperson for the SNP at Westminster, said:
“This is a devastating admission from the UK Government. Greg Hands has confirmed that despite Ofgem consulting on protecting credit balances as far back as October 2019, the UK Government never acted subsequently.
“The price of that is, firstly, unscrupulous energy companies continued using customer credit balances to fund risky business practices which then led to failures. In fact, 38 energy companies have gone bust since the consultation in October 2019 – with their customers credit balances lost - leaving all households to pick up the tab since recouping these losses are mutualised across everyone’s bills.
“To put that into context, when Ofgem increased the price cap last month, it was estimated that 10 per cent of the increase was to cover the cost of those failures. That is to say, around £68 added to every household bill in the country.
“This provides a compelling argument why the UK Government must act to ensure a stronger regulatory framework for energy suppliers, to prevent a repeat of the current energy crisis.”